It was one of Avery's most puzzling cases. That morning Cornelius Upton, the autocratic CEO of Upton Oil, was found dead in a pool of blood on his bedroom floor. He had been shot but the door and windows were bolted on the inside and there was no sign of the murder weapon. Avery looked in vain for clues in Upton's bedroom and office. He had to take another tack. He decided to investigate the financial circumstances surrounding Upton's demise.

The company's capital structure was as follows:

5% debentures: $250 million face value. The bonds mature in 10 years and offer a yield of 12%.

Stock: 30 million shares, which closed at $9 a share the day before the murder.

10% subordinated convertible notes: The notes mature in one year and are convertible at any time at a conversion ratio of 110.

The day before the murder these notes were priced at 5% more than their conversion value. Yesterday Upton had flatly rejected an offer by W. Forkes to buy all of the common stock for $10 a share. With Upton out of the way, it appeared that Forkes' offer would be accepted, much to the profit of Upton Oil's other shareholders. Upton's two nieces, Lindsay and Elise, and his nephew Paul all had substantial investments in Upton Oil and had bitterly disagreed with Upton's dismissal of Forkes's offer. Their stakes are shown in the following table:

5% Debentures (Face Value)

Shares of Stock

10% Convertible Notes (Face Value)

Lindsay

$4 million

1.2 million

$0 million

Paul

0

0.5

5

Elise

0

1.5

3

All debt issued by Upton Oil would be paid off at face value if Forkes's offer went through. Holders of the convertible notes could choose to convert and tender their shares to Forkes. Avery kept coming back to the problem of motive. Which niece or nephew, he wondered, stood to gain most by eliminating Upton and allowing Forkes's offer to succeed?

Help Avery solve the case. Which of Upton's relatives stood to gain most from his death? Summarize why you think each relative may or may not have been responsible for the death in regards to their own share within the company.